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Should Vanguard S&P 500 Growth ETF (VOOG) Be on Your Investing Radar?

Launched on 09/09/2010, the Vanguard S&P 500 Growth ETF (VOOG) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $6.14 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Further, growth stocks have a higher level of volatility associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.

Costs

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 44.90% of the portfolio. Consumer Discretionary and Healthcare round out the top three.

Looking at individual holdings, Apple Inc. (AAPL) accounts for about 14.50% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).

The top 10 holdings account for about 53.31% of total assets under management.

Performance and Risk

VOOG seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of large-capitalization growth stocks.

The ETF has lost about -30.95% so far this year and is down about -21.10% in the last one year (as of 10/03/2022). In the past 52-week period, it has traded between $208.55 and $305.94.

The ETF has a beta of 1.07 and standard deviation of 27.26% for the trailing three-year period, making it a medium risk choice in the space. With about 242 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard S&P 500 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VOOG is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $66.35 billion in assets, Invesco QQQ has $144.88 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.


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Vanguard S&P 500 Growth ETF (VOOG): ETF Research Reports
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Invesco QQQ (QQQ): ETF Research Reports
 
Vanguard Growth ETF (VUG): ETF Research Reports
 
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